One-Sample Tests of Hypothesis

Chapter 10

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Learning Objectives
LO10-1 Explain the process of testing a hypothesis
LO10-2 Apply the six-step procedure for testing a
hypothesis
LO10-3 Distinguish between a one-tailed and a two-
tailed test of hypothesis
LO10-4 Conduct a test of a hypothesis about a
population mean
LO10-5 Compute and interpret a p-value
LO10-6 Use a t-statistic to test a hypothesis

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Hypothesis Testing
 Hypothesis testing begins with a hypothesis statement
about a population parameter

HYPOTHESIS A statement about a population parameter subject to

verification

Examples
 The mean speed of automobiles passing milepost 150 on
the West Virginia Turnpike is 68 mph
 The mean cost to remodel a kitchen is $20,000

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Hypothesis Testing (2 of 3)
 The objective of hypothesis testing is to verify the validity
of a statement about a population parameter

HYPOTHESIS TESTING A procedure based on sample evidence and

probability theory to determine whether the hypothesis is a reasonable
statement.

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Step 1 of the Six-Step Process
 State the null hypothesis (H0) and the alternate
hypothesis (H1)
NULL HYPOTHESIS A statement about the value of a population
parameter developed for the purpose of testing numerical evidence.

 The null hypothesis always includes the equal sign

 For example; =, ≥, or ≤ will be used in H0

ALTERNATE HYPOTHESIS A statement that is accepted if the sample

data provide sufficient evidence that the null hypothesis is false.

 The alternate hypothesis never includes the equal sign

 For example; ≠, <, or > is used in H1

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Step 2 of the Process
 Next, you select the level of significance
LEVEL OF SIGNIFICANCE The probability of rejecting the null
hypothesis when it is true.

 Sometimes called the level of risk

 Can be any value between 0 and 1
 Traditionally,
 .05 is used for consumer research projects
 .01 for quality assurance
 .10 for political polling

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Possible Error in Hypothesis Testing
 Since the researcher cannot study every item or
individual in the population, error is possible
TYPE I ERROR Rejecting the null hypothesis, H0, when it is true.

 Type I error is designated with the Greek letter alpha,

TYPE II ERROR Not rejecting the null hypothesis when it is false.

 Type II error is designated with the Greek letter beta,

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The null hypothesis is the default position, akin to the idea of "innocent until
proven guilty," while the alternative is guilty.
A Type I error is Rejecting the null hypothesis, H0, when it is true. In this case it
would mean that the person is not found innocent and is sent to jail, despite
actually being innocent. =false positive
A Type II error is Not rejecting the null hypothesis when it is false. In this case it
would mean that the person is found innocent and is not sent to jail, despite
actually being guilty. =false negative

How to Avoid a Type I Error?

It is not possible to completely eliminate the probability of a type I error
in hypothesis testing. However, there are opportunities to minimize the risks of
obtaining results that contain a type I error.
One of the most common approaches to minimizing the probability of getting a false
positive error is to minimize the significance level of a hypothesis test. Since the
significance level is chosen by a researcher, the level can be changed. For example,
the significance level can be minimized to 1% (0.01). This indicates that there is a
1% probability of incorrectly rejecting the null hypothesis.
However, lowering the significance level may lead to a situation wherein the results
of the hypothesis test may not capture the true parameter or the true difference of
the test.
10-8
How to Avoid the Type II Error?
Similar to the type I error, it is not possible to completely eliminate the type II error
from a hypothesis test. The only available option is to minimize the probability of
committing this type of statistical error. Since a type II error is closely related to the
power of a statistical test, the probability of the occurrence of the error can be
minimized by increasing the power of the test.
1. Increase the sample size
One of the simplest methods to increase the power of the test is to increase the
sample size used in a test. The sample size primarily determines the amount of
sampling error, which translates into the ability to detect the differences in a
hypothesis test. A larger sample size increases the chances to capture the differences
in the statistical tests, as well as increasing the power of a test.
2. Increase the significance level
Another method is to choose a higher level of significance. For instance, a researcher
may choose a significance level of 0.10 instead of the commonly acceptable 0.05 level.
The higher significance level implies a higher probability of rejecting the null
hypothesis when it is true.
The larger probability of rejecting the null hypothesis decreases the probability of
committing a type II error while the probability of committing a type I error increases.
Thus, the user should always assess the impact of type I and type II errors on their
decision and determine the appropriate level of statistical significance.

10-9
Step 3 of the Process
 Then, select the test statistic
TEST STATISTIC A value, determined from sample information, used to
determine whether to reject the null hypothesis.

 In hypothesis testing for the mean, , when is known,

the test statistic z is computed with the following formula

 Using the z-value, we can determine probabilities that a

sample mean is within a specified number of standard
errors of the population mean.

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Step 4 of the Process
 Formulate the decision rule
 The decision rule is a statement of specific conditions
under which the null hypothesis is rejected and the
conditions under which it is not rejected
 The region or area of rejection defines the location
of all the values that are either so large or so small
that their probability of occurrence under a true null
hypothesis is remote
CRITICAL VALUE The dividing point between the region where the
null hypothesis is rejected and the region where it is not rejected.

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Critical Value
 The sampling distribution of the statistic z follows the
normal distribution
 Here, an of .05 is used in a one-tailed test
 The value 1.645 separates the regions where the null
hypothesis is rejected and where it is not rejected
 The value 1.645 is the critical value

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Steps 5 & 6 of the Six-Step Process
 Step 5 Make a decision
 Compute the value of the test statistic
 Compare the value of the test statistic to the critical
value
 Then, make the decision to reject or not to reject the
null hypothesis

 Step 6 Interpret the results

 What can we say or report based on the results of the
statistical test?

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Hypothesis Testing (3 of 3)

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10-15
One-Tailed and Two-Tailed Tests

H0: ≥ 60,000 miles H0: = $65,000 per year

H1: < 60,000 miles H1: ≠ $65,000 per year
with an α .05 with an α .05
Left-tailed test Two-tailed test

Note that the total area in the normal distribution is 1.0000.

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Two-Tailed Test Example, Known
Jamestown Steel Company manufactures and assembles desks and other office
equipment at several plants in New York State. At the Fredonia plant, the weekly
production of the Model A325 desk follows a normal distribution with a mean of
200 and a standard deviation of 16 desks. New production methods have been
introduced and the vice president of manufacturing would like to investigate
whether there has been a change in weekly production of the Model A325. Is the
mean number of desks produced different from 200 at the .01 significance level?

Step 1: State the null hypothesis and alternate hypothesis.

H0: μ = 200 desks
H1: μ ≠ 200 desks

Step 2: Select the level of significance. Here α = .01

Step 3: Select the test statistic. In this example, we’ll use z

10-17
Two-Tailed Test Example, σ Known (2 of 3)
Step 4: Formulate the decision rule by first determining the critical values of z.

Decision Rule: If the computed value of z is not between −2.576 and 2.576, reject
the null hypothesis. If z falls between −2.576 and 2.576, do not reject the null
hypothesis.

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Two-Tailed Test Example, σ Known (3 of 3)
Step 5: Take sample, from the population, compute the test statistic, make decision.
The mean number of desks produced last year (50 weeks because the plant was
shut down 2 weeks for vacation) is 203.5. The standard deviation of the
population is 16 desks per week. Compute z with formula 10-1.
x μ 203.5 200
z = = 1.547
σ/ n 16/ 50

Decision: Because 1.547 does not fall in the rejection region, we decide not to
reject H0.

Step 6: Interpret the result.

We did not reject the null hypothesis, so we have failed to show that the
population mean has changed from 200 per week.

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One-Tailed Test
Suppose instead of wanting to know if there had been a change in the mean
number of desks assembled, the vice president wanted to know if there had
been an increase in the number of units assembled. Can we conclude, because
of the improved production methods, that the mean number of desks assembled
in the last 50 weeks was more than 200? Use α .01.
Before: Now:
A two-tailed test A one-tailed test
H0: = 200 desks H0: ≤ 200 desks
H1: ≠ 200 desks H1: > 200 desks

10-20
The p-Value in Hypothesis Testing
p-VALUE The probability of observing a sample value as extreme as, or
more extreme than the value observed, given that the null hypothesis is
true.
 Compare the p-value with the level of significance,
 If the p-value is smaller than the significance level, reject H0
 If the p-value is larger than α, H0 is not rejected
 A p-value not only results in a decision about H0, but
gives additional insight about the strength of that decision

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Finding a p-Value
 In the previous example about desk production, the
computed z was 1.547 and H0 was not rejected
 Round the computed z-value to two decimal places, 1.55
 Using the z-table, find the probability of finding a z-value
of 1.55 or more by .5000 − .4394 = .0606
 Since this is a two-tailed test 2(.0606) = .1212
 In this chart, we can
easily compare the
p-value with the
level of significance

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Hypothesis Testing, Unknown
 When testing a hypothesis about a population mean

 The major characteristics of the t distribution are

 It is a continuous distribution
 It is bell-shaped and symmetrical
 There is a family of t distributions, depending on the number of degrees of
freedom
 It is flatter, or more spread out, than the standard normal distribution

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Hypothesis Testing, Unknown Example
The Myrtle Beach International Airport provides a cell phone parking lot where people
can wait for a message to pick up arriving passengers. To decide if the cell phone lot
has enough parking places, the manager of airport parking needs to know if the mean
time in the lot is more than 15 minutes. A sample of 12 recent customers showed they
were in the lot the following lengths of time, in minutes (see below).
At the .05 significance level, is it reasonable to conclude that the mean time in the lot
is more than 15 minutes?

Step 1: State the null hypothesis and the alternate hypothesis

H0: μ ≤ 15 
H1: μ > 15 

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Hypothesis Testing, σ Unknown Example (2
of 3)
Step 2: Select the level of significance; we will use .05
Step 3: Select the test statistic; we will use t since sigma is unknown
Step 4: Formulate the decision rule; reject H0 if t is less than 1.796

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Hypothesis Testing, σ Unknown Example (3
of 3)
Step 5: Take sample, calculate the sample mean and sample standard deviation,
calculate the test statistic, make decision

x μ 23 15
t= = = 2.818
s/ n 9.835/ 12

The test statistic of 2.818 is greater than our critical value of 1.796.
Therefore, our decision is: Reject H0 of μ ≤ 15

Step 6: Interpret the result: We conclude that the time customers spend in the lot is
more than 15 minutes. This result indicates that the airport may need to add more
parking places.

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 Chapter 10 Practice Problems

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Question 7 LO10-2, 3, 4, 6
A recent national survey found that high school students watched
an average (mean) of 6.8 movies per month with a population
standard deviation of 1.8. The distribution of number of movies
watched per month follows the normal distribution. A random
sample of 36 college students revealed that the mean number of
movies watched last month was 6.2. At the .05 significance level,
can we conclude that college students watch fewer movies a
month than high school students?
a. H0: μ ≥ 6.8, H1: μ < 6.8
b. Reject H0 if z < −1.645 (one-tailed, 0.05 significance level)
c. z = (6.2 − 6.8) / (1.8 ⁄ √36) = −2.0
d. H0 is rejected. We can conclude that college students watch fewer
movies a month than high school students
e. Using the z-table, the p-value is 0.0228. The mean number of DVDs
watched is less than 6.8 per month. If H0 is true, you will get a statistic
this small less than one time out of 40 tests.
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Question 13 LO10-2, 3, 4, 6

The mean income per person in the United States is

$60,000, and the distribution of incomes follows a normal
distribution. A random sample of 10 residents of
Wilmington, Delaware, had a mean of $70,000 with a
standard deviation of $10,000. At the .05 level of
significance, is that enough evidence to conclude that
residents of Wilmington, Delaware, have more income than
the national average?

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Question 19 LO10-2,3,4,5,6

A Washington, D.C., “think tank” announces the typical

teenager sent 67 text messages per day in 2017. To update
that estimate, you phone a sample of 12 teenagers and ask
them how many text messages they sent the previous day.
Their responses were:

At the .05 level, can you conclude that the mean number is
greater than 67? Compute the p-value and describe what it
tells you.

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